COURT OF A PPEAL S EI GHTH D I STRI CT OF TEX AS ELPASO, TEXAS

STOKES I

NTEREST, G.P., Appellant,

v. GEORGES SANTO-PI ETRO, Appellee

. § § § § § § No. 08-08-00326- CV

Appea l from 143rd District Court of Reeve s County , Texas (TC # 08-05-19089- CVR)

O P I N I O N This appea l stems from the trial court’s enfor ceme nt of a contra ctual forum selec tion clause

. Stokes I ntere st, G.P. filed suit in Reeve s County ag ainst Geor g es Sa n t o -Pietro (GSP) alleg ing a brea ch of war

ranty under the Dec eptive Trade Practice s Act as well as common law fra ud and fra udulent misrepre sentation. For the re asons that follow, we aff irm.
F ACTUAL BACK GR OUND On Aug ust 8, 2006, Thermonomics, I nc. and GSP enter ed in t o an Ag ent Ag ree ment containing a for

um selection cla

use: * * * * *12. Choice of Law , Jurisdi ction and P roce ss. The laws of the State of California

shall g overn this Ag ree ment. Venue and jurisdiction shal l be in Be verly Hills, California. 1 The ag ree ment rec ited that GSP held oil, g as and mineral lease s which wer e identified in Ex hibit A as (1) 320 acr es l ocate d: All of t he S outh 1⁄2, Section 28, Bloc k C-8 P.S.L ., Reeve s County Texas, and (2) 320 acr es loca ted: All of the North 1⁄2, Section 19, Blk. C-8 P.S.L ., Reeve s County Texas. The ag ree ment also rec ited that GSP wanted to sell the lease s, along with lease s and other oil and
g as assets owned by Thermonomics and identified in Ex hibit B, to be offe red i n a p ac k age to targ eted prospec tive oil and g as production companies/ope rators. To ef fectuate that intent, GSP appointed Thermonomics as his ag ent. Thermonomics was g rante d the exclusive rig ht during a 45- day period to offe r the lease s for sal e t o p rospec tive buy ers. Thermonomics ag ree d to pay GSP $37,500 as a non-re fundable advanc e to be cre dited ag ainst the share of the g ross proce eds to be distributed to GSP for any sale g ener ated by Thermonomics. The rmonomics was a lso gr anted the rig ht to rene w t he agr eeme nt for an addition al 45 day s by pay ing another $37,500 non-re fundable advanc e fee

. I f no sale we re c onsummated during the term of the contra ct, Thermonomics would forf eit the advanc es paid. Thermonomics paid the $75,000 advanc e fee s and consummated a sale 2 of GS P’s mineral int ere sts to Chesapea ke Ex ploration L imited Partnership. The sales agre ement, dated Oc tober 18, 2006, lists the parties as Chesapea ke and The Pecos Group, whic h is comprised of Thermonomics, GSP, Stokes, and J eff Moralez, d/b/a/ Savana Oil and G as. B y their respe ctive

T h e c o n t r a c t w a s d r a f

t e d b y S t e v e n F o d r i e , P r e s i d e n t o f T h e r m n o m i c s . G S P i s a r e s i d e n t o f B e v e r l y H i l l s , 1 C a l i f o r n i a . T h e r e c o r d c o n t a i n s a d o c u m e n t e n t i t l e d “ D i s c l o s u r e s , A c k n o w l e d g m e n t s , C o n s e n t s ” w h i c h i s s i g n e d b y 2 S t e v e n F o d r i e , P r e s i d e n t o f T h e r m o n o m i c s , a n d G S P

. I n p a r a g r a p h 2 , t h e p a r t i e s a c k n o w l e d g e t h a t T h e r m o n o m i c s p a i d a t o t a l o f $ 7 5 , 0 0 0 i n a d v a n c e s . -2-signa tures:

The Pecos Group repr esents and war rants that it h as a fu l l o ne hundred perc ent (100%) collective owner ship interest in eac h of the ROW’s, totaling approximately 3 eig hty (80) miles, that are in f

ull f orce and eff

ect and that The Pecos Group ha s the rig ht to sell and assig n the ROW’s into C hesape ake. Stokes is the assig nee of Thermonomics. I t filed suit ag ainst GSP alleg ing damag es arising from misrepre sentations that he owned a full 100 perc ent working interest in his oil and g as lease s when he knew he only owned a 75perc ent i ntere st. The C hesape ake sale purportedly fell t hroug h beca use of these misrepre sentations. Ba sed on the venue provision in the Ag ent Ag ree ment, the trial court dismissed the lawsuit.
F ORUM SELECTI ON Stand ard of Review A motion to dismiss is the prope r proce dural mecha nism for enfor cing a forum selec tion clause

. Acc elerated Christ ian Educ., Inc. v. Oracle Corp ., 925 S.W .2d 66, 70 (Tex.App.--Da llas 1996, no writ). Cons i s t en t wi t h the s tandar d of review we apply in revie wing motions to dismiss
g ener ally , we review dismi ssals predic ated on forum selection clause s fo r an abuse of di scre tion. See, e.g., My Café-CCC, Ltd. v. Lunchstop, Inc ., 107 S.W .3d 860, 864 (Tex.App.--Da llas 2003, no pet.). To the extent that our revie w involves contra ctual interpr etation of a forum sele ction clause

--a leg al matter-- the standard of revie w is de novo . See Southwest Intelec om, Inc. v. Hotel Networks Corp ., 997 S.W .2d 322, 324 (Tex.App.--Austin 1999, pet. de nied). Traditionally , Texas state courts and fede ral cour ts used differ ent analy tical constructs to

R O W i s t h e a c r o n y m f

o r p i p e l i n e r i g h t

- o f

- w a y . 3 -3-deter

mine the enfor cea

bility of mandatory forum selec tion clause s. Phoenix Network Technologies 4 ( Europe) Ltd. v. Neon Systems, Inc ., 177 S.W .3d 605, 611-14 (Tex.App.--Houston [1st Dist.] 2005,

no pet.). But the Texas Supreme Court has now adopted the fede ral approa ch. Michiana Easy Livin’ Country, Inc. v. Holten , 168 S.W .3d 777, 79 3 ( T e x. 2005); In re Automated Collection Technologies, Inc. , 156 S.W .3d 557, 558-59 (Tex. 2004); In re AIU Ins. Co. , 148 S.W .3d 109, 111-14 (Tex. 2004). Under the applicable leg al standard, the trial court presumes that a mandatory forum selec tion clause is valid and enfor cea

ble. M/S Breme n v. Zapata Off-Shore Co. , 407 U.S. 1, 10, 92 S.Ct

. 1907, 1913, 32 L

. E d

. 2 d 5 1 3 (1972); In re AIU Ins. Co. , 148 S.W .3d at 111-12. Full eff ect is g iven absent a strong showing by the resisting party that the court should set aside the clause beca use (1) the clause is invalid based on such rea sons as fra ud, undue influence , or overw eening barg aining power ; or (2) enfor ce m en t would be unrea sonable and unjust. M/S Breme n , 407 U.S. at 10-15, 92 S.Ct

. at 1913-16; In re AIU Ins. Co. , 148 S.W .3d at 111-12. Enforc ement of a forum selec tion clause would be unrea sonable and unjust if (1) enfor ceme nt would contra vene a strong public policy of the forum in which suit was filed, or (2) the balanc e of convenie nce is s trong ly in favor of litigation in the forum in which suit was filed, and litiga t i o n in the contra ctual forum would be so manifestly and
g rave ly inconvenient to the resisting party that it eff ectively would be deprive d of a meaning ful day in court. M/S Breme n , 407 U.S. at 15-19, 92 S.Ct

. at 1916-18; In re AIU Ins. C o
. , 1 4 8 S

. W

. 3 d at 111-12.

I n a f

o o t n o t e , D e e

p W a t e r S l e n d e r W

e l l s , L t d

. v
. S h e l l I

n t e r n
. E x p l o r a t i o n & P r o d u c t i o n , I n c
. , d e f i n e d a 4

“ m a n d a t o r y f

o r u m - s e l e c t i o n c l a u s e ” a s a c o n t r a c t u a l p r o v i s i o n t h a t r e q u i r e s c e r t a i n c l a i m s t o b e d e c i d e d i n a f o r u m o r f o r u m s o t h e r t h a n t h e f

o r u m i n w h i c h t h e c l a i m s h a v e b e e n f i l e d

. 2 3 4 S

. W

. 3 d 6 7 9 , 6 8 7 n . 3 ( T e x . A p p . - - H o u s t o n [ 1 4 t h D i s t

. ] 2 0 0 7 , p e t

. d e n i e d )

. -4-Lack of P leading Stokes first complains that dismiss al was improper beca use GSP failed to file a formal motion to dismiss and his trial brief was insufficient to join the issue. GSP respon d s that Stokes waived any defe ct in the pleading s by his failure to object. We ag ree . During the hear ing, the court

announce d its int ention to treat the me morandum of law as a motion to dismis s beca use there was

n o separ ately filed motion. Stokes stood silent and the hear ing continued. To prese rve err or, the complaint must be made to the trial cou rt by a timely reque st, objection, or motion that states the
g rounds for the ruling that the complaining party seeks from the trial court with sufficie nt specific ity
to make the trial court awa re of the complaint, unless the specific g rounds are ap pare nt from the
context. T E X .R.A P P .P. 33.1(a)( 1)(A)

. Convenient F orum I n Point of Error One, Stokes contends that the trial court should not have addre ssed forum
nonconvie ns and that it incorre ctly deter mined that California was a more convenie nt forum. Stated differ ently , Stokes claims that the issue was not proper ly befor e the court beca use GSP did not plead
t h at C ali fornia was a more convenie nt forum, nor did he offe r any evidenc e. His arg ument i s premised on the wrong leg al standard. Dee p W ater Slender W

ells, 2 3 4 S.W .3d at 692, citing Michiana Easy Livin’ Country, Inc. , 168 S.W .3d at 793. Be cause the trial court presumes t hat a mandatory forum selec tion clause is valid and enfor cea ble, GSP was not require d to show that California was a more convenie nt f orum. Stokes had the burden to demonstrate that (1) the clause

was invalid due to fra

ud, undue influence , or o v er we en ing barg aining power ; or (2) enfor ceme nt would be unrea sonable and unjust. M/S Breme n , 407 U.S. at 10-15, 92 S.Ct

. at 1913-16; In re AIU Ins. Co. , 148 S.W .3d at 111-12. B eca use it failed to do so, we overr ule Point of Error O ne.

-5-Scope of the For um Select ion Clau se

I n Point of Error Two, Stokes challeng es t he for um selection cla

use as va g ue, nar

row, a nd inapplicable. I t arg ues that the tort ca uses of a ction alleg ed her e ar ise out of the Chesapea ke sales
ag ree ment and are not subject to the forum selec tion provision of the Ag ent Ag ree ment. When a party s ee ks to enfor ce a mandatory forum selec tion clause , a court must deter mine whether the claims in question fall within the scope of that clause

. See Marinechanc e Shipping , L t d

. v. Sebastian , 143 F.3d 216, 221-22 (5th Cir. 1998). The court bases this deter mination on the lang uag e of the c lause a

nd the nature of the c laims that are a lleg edly subject to the cla

use. Id. Stokes arg ues t hat s ince the forum selection clause in the Agent Agr eeme nt does not even identify the subject matter to which it applies, it should n o t “e n compass claims from subsequent independe nt c ontrac ts a

nd oral misrepre sentations which are only tang entially rela ted to the Ag ent Ag ree ment.” GSP c ounters that since the forum selec tion c lause has no limit ing lang uag e, it is all inclusive. He conclude s that in the absenc e of some limit ing lang uag e, the clause at issue can only be re ad to provide ve nue and f or “a ll” claims arisingout the ag ree ment. We ag ree . We next look to the nature of the claims t h at ar e s u b j ect to the clause

. Marinechanc e Shipping, 143 F.3d at 222. Stokes’ claims ag ainst GSP include brea ch of war ranty under the DTPA and fra udulent misrepre sentation under common law. Stokes arg ues that these claims are based on GSP’s knowing misrepre sentations in the sales ag ree ment and are not subject to the forum selec tion provision of the prior A g ent Ag ree ment. The re cord be lies these ar g uments. I n its orig inal petition, Stokes claimed its actua l damag es included the $75,000 advanc e fee s

-6-paid to GSP in connec tion with the oil and g as lea ses. The ba sis for pay ment of the a dvance fee s 5 is the Ag ent Ag ree m en t

. The petition also alleg ed that as a proxi mate result of the misrepre sentations, the s ale of 72 acr es of Stokes’ oil and gas le ases did not close. Sandy Stokes testified:
DI RECT EXAMI NATI ON Q: Are y ou suing for y our 7 2 acr es that y ou purcha sed in relianc e on the repr esenta tion to Mr. Morales [si c] by Mr. Pietro made afte r the Ag ency Ag ree ment that he owne d one hundre d perc ent? A: Yes, sir. J eff Moralez testified about the 72 a cre s as well:
DI RECT EXAMI

NATI ON Q: Were y ou active with Mr. Stokes in acquir ing the 72 acr es that are being sued for in this case? A: Yes, sir, ve ry

active. * * * * * Q: And activities in connec tion with the 72-ac re lease th at Mr. Stokes acquir ed subsequent to Aug ust 8th, 2006, where w ere those perf ormed? A: Her e in Pecos, Te x as, Reeve s County

. * * * * * CROSS EXAMI

NATI ON Q: The 72 a cre s, is that refe rre d to as the Voulg aris [sic] lease ?

A l t h o u g h t h e “ D i s c l o s u r e s , A c k n o w l e d g m e n t s , C o n s e n t s ” i n s t r u m e n t s p e c i f i e s t h a t T h e r m o n o m i c s p a i d t h e 5
m o n e y , S a n d y S t o k e s t e s t i f i e d a t t h e h e a r i n g t h a t h e p a i d i t

. M r . S t o k e s t e s t i f i e d t h a t t h e r e w a s a w r i t t e n a s s i g n m e n t b e t w e e n S t o k e s I n t e r e s t s , G

. P

. a n d T h e r m o n o m i c s t h a t w a s e x e c u t e d i n 2 0 0 8 b u t i t w a s n o t t e n d e r e d a s a n e x h i b i t a n d i t d o e s n o t a p p e a r i n t h e r e c o r d

. -7-A: That’s c orre ct.

Q: And do y ou rea liz e that is attac hed to the Ag ency Ag ree ment as an e x hibit? A: I do now. Q: Okay

. So what y ou’re say ing is the 72 acr es was contemplated specific ally in the Ag ency Ag ree ment? Would y ou like to see y our petition, sir? A: Yes, sir. * * * * * Q: I ref er to y ou the Ag ency Ag ree ment, Ex hibit A to the petition, dated Aug ust 8th, 2006. Does that appea

r to be a true and corr ect copy of the exhibi t to y our petition? A: That’s the a g ent ag ree ment. Q: Now I want t o re fe r y o u to Ex hibit B to that Ag ency Ag ree ment. Does it specific ally

ref er to 72.36 a cre s ref

err ed to as the voulg aris [sic] lease ? A: Yes. How ever

-- Q: Thank y ou, sir. Now, what y ou said previously about the 72 acr es not being a part of the Ag ency

Ag ree ment is not corre ct, is it? A: Well, that’s not true, beca use that lease we had acquir ed prior, and it expired, and once w e g ot Mr. Pietro on board, we went and r e-le ased tha t property

. Q: Okay

. But it was ref err ed to specific ally in the Ag ency Ag ree men t d at ed Aug ust 8th, 2006? A: We just read that, y es. Although Mr . Stokes and Mr. Mora lez spoke in terms of purc hase a nd acquisition of the 72 ac res afte r the Ag ent Ag ree ment was executed, those 72 acr es, known as the Volg aris lease , are listed in
Ex hibit B of the Ag ent Ag ree ment as assets of Thermonomics. Only when confr onted with Ex hibit
B did Moralez clar ify that the lease had simply been rene wed. And Ex hibit B actua lly addre ssed the provisions for re newa l:

-8-1. 72.36 Acr es re fer red to a s the Volg aris L ease located: West part of the N/2, Sec 28, Blk. C-8 P.S.L

. T h i s is Paid-Up 80% lease with 10% to the L and Owner and 10% to the State of Texas. I t is a 3 y ear primary term with a 2 y ear option at $300.00 per a cre taken July

12th, 2006. Moralez could not reme mber the date that the l ea s e wa s re n ewed, but he claimed he had to pay $22,000 for it. Simple mult iplication informs us that pursuant to the terms of the l ease , a re newa l within the option period would cost $21,708 (72.36 ac res X $300 pe r ac re)

. Clearly the basis for all of Stokes’ claim s s t em from the Ag ent Ag ree ment. We overr ule Point of Error Two a

nd aff irm the dec ision of the trial court.

J uly 28, 2010 ANN CRAWFORD McCL URE, J ustice Be fore McClure, J., R ivera , J ., and Gua derr ama, Judge Guade rrama, J udg e, sitting by assig nment

-9-