### TEXA S C OU R T OF A PPEAL S, THIR D DIST R ICT , AT AU STIN

NO. 03-0 8 -00 286 -CV
Appellan t, F irst ATM, Inc.// Cross- Appellan t, Onedoz, Inc. d/b /a Resevoir Tavern
v. Appellees, Onedoz, Inc. d/b /a Resevoir Tavern and Neil Donal dson

// Cross-Appellee , F irst ATM, Inc.

F ROM COUNTY COURT AT LAW NO. 2 OF TRAVIS COUNTY NO. C-1- CV-07 -01 2717 , HO NORAB LE ERIC SHEP P ERD , JUDGE PRESIDI NG

M E M O R

A N D U M O P I N I O N This is an appea l from the trial c ourt’s ruling s on special a ppear an ce s filed by defe ndants Onedoz, Inc. d/b/a Resevoir Tave rn and N eil Donaldson. Plaintiff First ATM, Inc. sued the def endants for

brea ch of c ontrac t, arguing that they were s u b

j ect to the c ourt’s per sonal ju risdiction based on the c ontrac t’s forum-se lection clause . We affir m the trial court’ s denial of the sp e c ia l app e ara

nc e of On e do z be c a

us e e nf or c ingthe fo rum- se le c tio n c la us e a g a ins t it

wo uld not be unre asonable and unjust. We affirm the tr ial court’s g rantingof Ne il Donaldson ’s s pecia l
a pp e ara nc e be c a us e he wa s n ot a

pa rt y to t he c on tr a c t.
Fac tua l an d P

ro c e dural B ackg

ro und Onedoz, a Washing ton c orporation that owns and operates a sing le taver n in Seattle, Was hin g ton , ente red into a c on tr a c t in

Oc tob e r 2 00 5 w ithF ir st A TM , a Te xas c or

po ratio n, to2

purcha se an a

utomated teller ma chine (ATM) a nd provide for

its service a

nd maintenanc e. Af

ter
a dis pute aro se be tw e e n th e parties , F ir st A TM su e d O ne do z an d it s o wn e r a nd pr e sid e nt, Ne il D on a lds on , in

No ve mbe r 2 00 7 f

or br e a c h of co ntr a c t in c ounty c ourt in T ra vis County , T e xas. Onedoz and Dona ldson eac h contested the court’s jurisdiction by specia l appea ranc e. SeeTe x. R. Civ. P . 120a. The trial court g rante d Donaldson’s specia l a ppear ance , but de nied Onedoz’s spec ial appea ranc e. The trial court also, on reque st, issued finding s of fac t a nd conclusions of lawreg arding its orders on the spe cial appe ara nces. SeeTe x. R. App. P. 2 8. 1( c ). Ap pe lla nt F ir st A TM a

pp e a ls the g rant of appellee Donaldson’s specia l a ppear ance , and cross-a

ppellant Onedoz appea ls the denial of its special a

ppear ance . SeeTex. Ci v. Prac. & Rem. Code Ann. § 51.014(a )(7) (West 2008). Special Appearance by O nedoz, Inc.

We first addre ss Onedoz’s appea l of the trial court’s de nial of its special a ppear ance . Whether a c ourt has personal jurisdiction over a defe ndant is a question of law
. BM C So ftwa re Belgium, N.V. v. Marc hand , 83 S.W .3d 789, 794 (Tex. 2002). In revie wing the denial of a spec ial appea ranc e whe n, as in this case, the trial court issued f indings of fac t and conc lusions of law, the cour t of appe als revie ws the fa ct finding s for both leg al and fac tual sufficie ncy , and re views the leg al conc lusions de novo. See id. at 793-94. Onedoz contends that the tria l court er red in issuing its c on c lus ion

of law that O ne do z fa ile d to pr ov e that en for cem ent of the fo rum- se le c tio n c la

us e would be unre asonable and unjust. Our re view is de novo.On e do z did no t argue a t th e tr ia l c ourt , and do e s n ot a

rgue to t his Court , th a t th e fo rum- 1 selec tion c lause was invalid due to f raud or some other theory that would make t h e p rovi sion unenfor cea

ble as a matter of c ontrac t law. 3 The c ontrac t betwee n First ATM and Onedoz contains the followingforum-se lection clause :
Go ve rn ingL aw. Th is Ag re e me nt sha ll be c on str ue d a nd g ov e rn e d in

a ll r e sp e c ts i n acc ordanc e with Texas l aw , excluding its principles of c onflicts of laws, a nd the parties h e r e to ir

r e v o c a b ly s u b mi t t o th e ju

r is d ic ti o no f

th e St a te o f

T e xa s an d

the ve nu e of Tr avis County

in a ny a c tio n b ro ug ht b y

the pa rt ie s h e re to c on c e rn ingthi s Ag ree ment or the pe rfor

mance there of.
Under Texas law, enf

orce ment of a f

orum-se l ec t i o n clause is require d unless the par ty opposing
e nf or c e me nt “ c le arl y

sh ow s that e nf

or c e me nt wo uld be unre a so na ble and un

jus t, or tha t th e c la us e was invalid for

such re asons as fr au d o r o v err eac hing.” In re Automate d Collection Techs., Inc. , 1 5 6 S
. W
. 3 d

5 5 7 , 5 5 9 (T ex . 2 0 0 4 ) ( qu o t i n g In re AI U Ins. Co. , 148 S.W .3d 109, 112 (Tex. 2004)). On e do z co nte nd s th a t e nf or c ingthe fo rum- se le c tio n c la us e wo uld

be unre a so na

ble and un ju st 1 beca use (1) the clause was not fr eely neg otiated, (2) the key witnesses are in Washing ton, (3) One doz do e s n ot h ave the fi na

nc ia l re so ur c e s to a de qu a te ly lit ig a te in Te xas, and (4 ) O ne do z ha s n o c on ta c ts wi th t he State of

Te xas. I n support of i ts argument that the forum-selection clause wa s not free ly neg otiated, Onedoz asser

ts that the clause is pa

rt of four pag es of boiler

plate languag e in fine pr int, located on the bac k sides of the four pag es that co n t ai n t h e Onedoz-specific c ontrac tual provisions and the signatures of Onedoz’s repr esenta tive. Howeve r, althoug h Onedoz asser ts that the forum-se lection clause was ne ver a ctually

“discussed” betwee n the par ties, the first pag e of the contra ct states, above4

Onedoz’s sig nature : “FA TM and [Onedoz] both ag ree to the Terms an d C o n d i t ions and all other Ag ree men t s associated with this P roce ssing Agree ment. Both pa rties ag ree that they

have r ead all four ( 4) pag es of this Ag ree ment (fr ont and bac k).” Moreove r, a non-neg otiated forum- selec tion cl au s e i na b o i l er

p l at e c o n t ex ti s n o t u n en fo rc eab l e s i mp l y b ec au s e i ti s n o tt h e s u

b j ec to f b ar gai n i n g. See Ca rn iv al C

ru iseLin es, In c . v . S

hu te , 4 9 9 U
. S
. 5 8 5 , 5 9 3

- 9 4 ( 1 9 9 1 )
. G i v e n t h a t O ne do z by its signature re prese nted it had re ad t h e for um-selec tion clause, a

nd that Onedoz is not arg uing the exis tence of fr aud or ove rre aching , we conclude that Onedoz’s contention that the f orum-sele ction clause itself was not f

ree ly neg otiated does not we aken the validity of the c lause. See In re L

yon Fin. Servs., I nc. , 2 57 S.W. 3d

22 8, 23 2- 33 (T e x. 20 08 ) ( “ [P]ar tie s to a c ontr act hav e an

ob lig a tio n to pr ote c t th e mse lve s b y

re a din g wh a t th e y

sig n a nd , a bs e nt a sh owing of

fr a ud , c ann ot e xcu se themselves fr om the conseque nces of failing to meet that obligation.”). On e do z co nte nd s th a t a ll c omm un ic a tio ns and a c tiv iti e s be tw e e n the pa rt ie s p ri or to the lawsuit took place in Washington, including the solicitation, neg otiation, and execution of the contra ct and the ma intenance and pay ment issues th at subsequently arose , and ther efor e, the fa ct w it

n e s s e s o f r e le v an c e a ll r e s id e in Wa s h in g to n . A c c o r d in g to O n e d o z, th e r e le v an t f act witnes s es ar e O n ed o z re p re s en t at i v es , em p l o y ee s , an d cu s t o m er s l o ca t edi nS ea t t l e, W ashing ton, and First ATM employ ees located in its Fa ll City , Washington office
. Onedoz asser ts that being forc ed to l iti g a te in T e xas whe n a ll the wi tne sse s are in Wa sh ing ton wi ll m ake it di ff

ic ult fo r O ne do z to build an eff

ective de fense , and will e ffe ctively deprive Onedoz of its da y in c ourt. We disag ree . The Texas Supreme Court rec ently reje cted a

challeng e to a f

orum-sele ction clause based, in par t, on t h e reasoningOnedoz advanc es her e. See I n re AIU Ins. Co. , 148 S.W .3d at 112-14 (e nforc ing5

the contra cted Ne w Yor k fo rum even thoug h “many if not most potential witnesses reg arding
cover ag e issues ar e in Texas”). Mor eover , acc ordi n g t o t h e supreme c ourt in a more r ece nt case ,

“ [b]y e nte ri ngint o a

n a g re e me nt w ith a fo rum- se le c tio n c la us e , the pa

rt ie s e ff e c tiv e ly re pr e se nt t o
eac h other that the a g ree d forum is not so inc onvenient that enfor cingthe clause will deprive e ither party of its day in court.” In reLy on Fi n. Se rv s. , 2 57 S.W. 3d

a t 23 4. Th e re fo re , the fa c t th a t mo st of the witnesses are located in Washing ton, e ven if true, does not provide suff icient proof to show an “unjust re sult” if the forum- selec tion clause is enf orce d. Onedoz next asser t s t h at, bec ause of the distance betwee n Seattle, Washington
and Tr avis County , T e xas, it la c ks fi na nc ia l re so ur c e s to lit ig a te in T e xas. On e do z co nte nd s th a t it will b e forced to re ly

on videotaped te stimony or deposition testimony

at trial, or e ven not pursue valuable w itness testimony , beca u s e o f the hig h cost of bring ing w itnesses into Texas for an ind e fi nit e tim e . O ne do z ha s th e burd e n to sh owthat li tig a tin g in Te xas “ wi ll b e so g ra ve ly dif fi c ult and inconve nient that [i t] will f or all prac tical purposes be depr ived of [its] day in court.” Se e In re AIU I ns. Co. , 1 4 8 S
. W
. 3 d

at 1 1 3 (q u o t i n g The Breme n v. Z a p ata Off-Shore Co. , 407 U.S. 1, 18 (1 97 2) )
. O n e d o z ’ s u n s u

p p o rt e d p l e a d i n g s r e g ar d i n g i t s f

i n an c i a l c o n d i t i o nan d

i t s e xp e c t e d

c os ts of litigation in Tex as do not meet thi s b u rden. “ I f mere ly stating that financia l and log istical difficulties will p rec lude litigation in another state suffic es to avoid a f orum-sele ction clause , the clause s are prac tically

useless.” In reLy on Fi n. Se rv s. , 257 S.W .3d at 234. L a s t l y , O n e d o z a s s e rt s t h a t i t h a s n o c o n t a c t s w i t h t h e S t a t e o f T e xa s an d t h a t , a s a result, the i n t er ests of the witnesse s and the public strong ly favor jurisdiction in the St ate of Washington. W hether

a def endant pur

posefully established minimum contacts with a for um is not6

rele vant when there is an enfor cea ble forum- selec tion clause. See Burger King Corp. v. Rudze wicz , 47 1 U .S. 46 2, 47 2 & n. 14 (1 98 5) ; Abacan Tec h. Servs. Ltd. v. Global Marine I nt’l Ser vs. Corp. , 994 S.W .2d 839, 843 (Tex. App.—Houston [1s t Dist.] 1999, no pet.). In addition, the “intere sts of the witnesses and the publ ic” is no longe r a leg al s tandar d in Texas for dec iding whe ther to enf orce a for um-selec tion clause. See D eep W ater Slender W

ells, Ltd. v. Shell Int’l Exploration & Prod., Inc. , 234 S.W .3d 679, 692 (Tex. App.—Houston [14t h Dist.] 2007, pet. filed).

We ag ree with the trial court’ s conclusion of lawthat Onedoz failed to prove that enfor ceme nt of the for

um-selec tion cl ause would be unrea sonable a nd unjust. W e af

firm the trial court’ s denial of One doz’s special appe ara nce. Special Appearance by N eil Donaldson We next turn to First ATM’s appea l of t he trial court’s gr anting of Ne il Donaldson’s specia l appea

ranc e. F irst ATM contends that the tria l court er red in enteringits conclusions of law that Donaldson did not e nter into the contra ct in his indivi dual ca pacity , and is not a par

ty subject to the terms of the c ontrac t, including the f orum-sele ction clause . I n re v i ew i n g t h e grantingof a specia l appeara n ce wh en, as in thi s case , the trial cour t issued findings of

fac t and conc lusions of law, w e re view the trial court’s leg al conclusions de novo. BMC Software Belgium , 83 S.W .3d at 793-94. First ATM c oncede s that the Travi s C o u n t y court only

has per sonal jurisdiction over D onaldson in this lawsuit if he is a party to the contra ct and, thus, subject to the f orum-sele ction
c la us e . F ir st A TM a lso c on c e de s th a t un de r t he c ontr a c t Oned oz is th e pr inc ipa l ob lig or of a ll amount s that become due to Fir st ATM under the c ontrac t, but argues that under the contra ctFirst ATM also points out i n its briefing that “Ne il Donaldson,” not Onedoz, I nc., is printed 2 on the “Mer chant Name” line in the contra ct’s signature blocks. Howeve r, Firs t AT M co n ce ded during oral a

rgument that Onedoz, not Donaldson, is the principal oblig or. 7 Donaldson is made gua

rantor of such amounts. Ther efor e, whe ther Dona ldson’s special a ppear ance should have be en denie d depends e ntirely on whether

Donaldson is m ad e g uara ntor under the c on tr a c t. F ir st A TM re lie s o n tw o p ro vis ion s o f t he c on tr a c t to e sta

bli shthat D on a lds on

is a g uara ntor. 2 First ATM points to section 1.10 of the c ontrac t’s Schedule 01, whic h identifies the c on tr a c tin g “ Me rc ha nt” a s “ the e nti ty

receivi ng go od s and

se rv ic e s f

ro m F AT M, a s b oth ins tit uti on and a s in div idu a l gua

ra nto r.” First

AT M c on te nd s th a t th is d e fi nit ion “ c le arl y encompa sses Neil Dona ldson in his i nd i v i d u al capa city .” Howe ver, the re is no dispute that Onedoz—not Donaldson—is the entity rec eiving g oods and ser

vices fr om First ATM. The ref ore, if any thing, ba sed on its plain lan gu age , section 1.10 identifies One doz—not Donaldson—as the “individual g uara

ntor.” Ne xt, F ir st A TM re lie s o n s e c tio n 3 .5 of Sc he du le 01 , w hic h s tate s:
I n s u ra n ce. T he Mer chant a g ree s to obtain and maintain all insuranc e cove rage require d by

law, re g ulations and prudent business pra ctice s in connec tion with the use of the Me rcha

nt ATM and the u s e o f FA TM’s Proce ssing Ser vices. The individual exec uting this Agreem ent shall be per s o nally liable for all

amounts due to FA TM un de r th is A gr e e me nt. F u rth e r mo r e , M e r c h an t i s to d e s ign a te F A T M as loss pay ee for any and all claims associated with Merc hant ATM. F ailure to provide s uch insuranc e or make said de signation shall make Merc hant per sonally and primarily liable for a

ny damag es, leg al expenses and loss of re venue.8

(E mph a sis a dd e d) . Set ting a sid e the qu e sti on a ble pla c e me nt o f a

state me nt o f p e rs on a l gua ra nty within a section labe led “Insuranc e,” w e find that the state m en t d o es not make D onaldson a g uara ntor bec ause the re is no evide nce that Donaldson exe cu t ed t he contr act in his individual
c a p a c i t y. F ir st ATM c on c e de s th a t D on a lds on ’s sin g le sig natur e on e a c h p a g e wa s ma de in his repre sentative c apac ity as an of fice r of One doz, but contends that the s igna tures were also made in his indi vidual capa city . First ATM r eli es on Taylor-Made H ose, Inc . v. W

ilkerson , in which the San A nto nio Court

of Ap pe a ls h e ld t

hat a c or po ratio n’ s c re dit

a pp lic a tio n unambi g uo us ly established the offic er who signe d the application to be the persona l gua rantor of the cor poration’s debt. 21 S.W.3d 484, 488 (Tex . App.—San Antonio 2000, pet. d en ied). How ever , First ATM’ s contra ct and the instrument in Tayl or -Ma deHo seare dissimi lar. Althoug h there was only one signature line on the c redit application at issue in Tay lor-M ad e Ho se , tw o “ te rm s a

nd c on dit ion s” immediately

prec eded the office r’s sig nature : the first beg inning with “We a g ree to pay ,” and the sec ond beg inning with “I persona lly

ag ree to pay .” Id. at 486. I n contra st, neither Schedule 01 of the c ontrac t at issue here , nor the signature line (on a separ ate pag e) that incorporates Schedule 01, depar ts f rom the entity -spec ific terms “Me rcha nt” or the “ party .” Schedule 01 contains no statement in first person, a

nd Donaldson’s sig nature is in no way identified as be ing ma de i n an individual capa ci t y . There fore , Donaldson’s a ssent by his signatur e to the stateme nt that the individual
e x e c u t i n g t h e c o n t r a c ti s p e r s o n a l l y l i a b l e w a s m a d e s o l e l y i nh i s r e p r e s e n t a t i v e c a p a c i t y. Consequently , the statement c a nn o t b in d D o n a ld s o n individually , as he ne ver a g ree d in his indi vidual capa city to be bound by any provision of the contra ct. See B lock v . Aube , 718 S.W .2d 914, 9159

(Tex. App.—Be aumont 1 9 8 6 , no writ) (intent of pa rty to contrac t to become liable a s a guara ntor must be evidenc ed in the contr act “ with rea sonable c lear ness”)
. We a g re e wi th t

he tr ia l court ’s c on c lus ion s of law that Don a lds on did no t e nte r i nto the contra ct in his indivi dual ca pacity and is not a party

subject to the terms of the contra ct, including the forum- selec tion clause. We af firm the trial c ourt’s g rant of D onaldson’s spec ial appea ranc e.
Conclu sion We affir

m the o rders of the trial c ourt g rantingthe spec ial appea ranc e of Neil Donaldson a

nd denying the specia l appea ranc e of O nedoz, I nc.

__________________________________________ G. Alan Waldrop, Just ice Be fore J ustices Patterson, Waldrop and H enson Affir med Filed: F ebrua

ry 13, 2009